INDUSTRY CAPABILITY REPORT

Transcription

1 INDUSTRY CAPABILITY REPORT SRI LANKAN CERAMIC SECTOR Prepared by: Export Development Board (EDB), Sri Lanka December, 2015

2 CONTENTS 1. INTRODUCTION KEY PRODUCTS AND VARIETIES TYPES OF PLAYERS SEASONAL VARIATION KEY PLAYERS IN THE SECTOR 7 6. GEOGRAPHICAL DISTRIBUTION ACROSS THE COUNTRY SIZE IN TERMS OF PRODUCTION (VALUE/QUANTITY) NUMBER OF PEOPLE EMPLOYED IN THE SECTOR GOVERNMENT POLICY AND SUPPORT AVAILABLE IN THE SECTOR R&D AND PRODUCT DEVELOPMENT FACILITIES AVAILABLE TOTAL EXPORTS OF PRODUCTS IN SELECTED CATEGORIES OF THE SECTOR GROWTH IN LAST 5 YEARS IN EXPORTS AND MAIN IMPORTING COUNTRIES STRENGTHS AND WEAKNESSES OF THE SECTOR Sri Lankan Ceramic Sector 2

3 1. INTRODUCTION Sri Lanka s ceramic industry boasts a history dating back several centuries. The historical ruins in the country bear testimony to the rich diversity of ancient craftsmanship and the skills of the craftsmen themselves. The distinctive designs and exquisite elegance of the ceramic products manufactured to up market segment of the world by the Sri Lankan Ceramic industry today vividly illustrate the influence of this rich heritage and traditional craftsmanship influence. The Island is endowed with raw materials used in the ceramic industry such as kaolin, ball clay, feldspar, silica quartz and dolomite. The excellent quality and purity of these materials which is available in abundance contribute to the high standards of the products. Domestic value addition has become an essential factor when exporting products utilizing duty advantages offered under trading arrangements. Being over 60% value addition, the ceramic industry ranks high amongst the locally manufactured export products. Excellent quality and purity are the hallmark of natural resources in Sri Lanka. The Kaolin, Feldspar, Ball clay, Silica, Quartz, Dolomite that is used in manufacture of ceramic products are the best that can be found. International reputation for Sri Lanka ceramic products has been established with the quality and finish from the use of these raw materials along with Pigments and miscellaneous chemicals for preparation of Glazes, decal, Liquid Gold and Silver obtained from well established international sources. As a result of perfect combination of advanced technology and the traditional indigenous craftsmanship, Sri Lankan products can be found in top department stores such as Macy s, Crate & barrel, Marks & Spencer, Hallmark and Pottery Barn in USA, El Corte Ingles in Spain, Debenhams, Susie Watson Designs, John Lewis, and House of Frazer in UK, Sanrio and Isetan in Japan. Also, Sri Lanka manufactures products for reputed licensors such as Walt Disney, Universal Studios, Lucas Arts and Warner Brothers to name a few. All Sri Lankan tableware products conform to Food Sri Lankan Ceramic Sector 3

4 and drug Administration (FDA) norms and ASTM Standards. Main export markets of Tableware & kitchenware are USA, Japan, UAE, Italy and India. Main export markets for tiles are Australia, U.S.A., Canada, Netherlands and Maldives. This industry has some significant operational strength, including a highly skilled workforce, competitive labor costs, and excellent management at factory levels, state-of-the-art technology, research and development facilities, high ethical standards and confidentiality of design integrity, in contrast to Asian competitors. Further, Sri Lanka is proud of exporting under their own brands: Dankotuwa, Elan, Royal Fernwood and under the back stamp of Noritake. 2. KEY PRODUCTS AND VARIETIES Sri Lankan ceramic industry supplies ceramic products to the international market under four major categories. 1. Porcelain Tableware 2. Ornamental ware & utility ware 3. Tiles including wall tiles & floor tiles 4. Sanitary ware & Bath ware In addition, following products are manufactured by the industry. - Earthenware & stoneware products - Cements, glass & refractory - Red brick, roofing tiles and terra cotta products According to the export statistics of last ten years, ceramic tableware and ornamental ware are the key segments of ceramic exports of the country. Sri Lankan Ceramic Sector 4

5 PORCELAIN TABLEWARE A range of body shapes and decoration techniques in tableware gives Sri Lanka a great versatility as a country which can deliver high quality elegant contemporary and traditional designs to the world. Sri Lanka s exquisite porcelain products are being much sought after because of the in-glaze, on-glaze and under-glaze decorations, heavy metal free decorations, ornate and difficult gold decorations, microwave-safe designs in gold or platinum, dish washer safe construct and also our ability to supply high quality Ivory Porcelain (new bone china) and artistic porcelain dinnerware. Superior characteristics of Sri Lankan porcelain include a very high level of whiteness, high translucency, high scratch resistance and high thermal shock. All Sri Lankan products conform to Food and Drug Administration (FDA) norms and ASTM Standards. The tableware and kitchenware exports amount to around 68% of the country s total ceramic exports. There are three key players in the country and their main export markets are U.S.A., Japan, UAE, Italy and India. ORNAMENTAL/ UTILITY WARE Range of products include items such as figurines, household decorations, music boxes, chandelier ceramic accessories, kitchen accessories, bathroom accessories, garden articles and studio pottery. There are four key players in the country and their main export markets are U.K., U.S.A., Netherlands, Canada and Malaysia. TILES Floor tiles are available in a wide range of shades, designs, and finishes-rough or smooth surfaces-and sizes to suit any floor area in residential and commercial buildings. These include floor tiles especially suited for verandahs, sitting rooms, dining rooms, bed rooms, pantry, as well as for flooring outdoor space such as Sri Lankan Ceramic Sector 5

6 terraces, path-ways, ponds etc. They range from simple glazed tiles to multiple prints and manual hand painted to machine embroidered types. A variety of different textures to suit customer preferences: matt, rough, gloss, stone, marble, and terracotta finishes in a range of self-colours or shades are available. Wall Tiles are offered in a variety of colours, textures, and in different sizes including special trim tiles, decorated tiles, handmade and hand painted tiles conforming to British, European, Singapore, Hong Kong and Japanese Standards. Main export markets for Tiles are Australia, USA, Canada, Netherlands and Maldives. SANITARY WARE & BATH WARE Sri Lanka manufactures Bath ware & sanitary ware for both domestic and international markets. Use of imported clays and glaze raw materials with advanced production techniques enhances the product quality conforming to British standard specification BS EN , thereby ensuring that the products will be on par with that of any leading European manufacturer in terms of both design and quality. All the moulds are made from epoxy resin case moulds, which will ensure superior surface qualities and dimensional stability. Production facility of the main manufacturing company in Sri Lanka has been recognized internationally by leading sanitary ware industry specialists as one of Asia's most modern in terms of technology and production capability. Main export markets are Maldives and New Zealand. GLASS PRODUCTS The only company in Sri Lanka manufacturing glass products offers the entire moulded range of glass bottles for the food and beverages, pharmaceuticals, cosmetics and perfume industries. Main markets are India and Australia. Sri Lankan Ceramic Sector 6

7 3. TYPES OF PLAYERS Large scale exporters, SME exporters, Cottage base manufacturers and craft villages. 4. SEASONAL VARIATION Seasonal variation applies only for few items. Ceramic Tableware and souvenirs are highly demanded during the Christmas and New Year season. Dinnerware and Tableware for USA market is highly demanded during New year season until the month of April. Craft made of Ceramic Tableware Ceramic Ornamental ware Seasonal Variation Highly demanded in New Year & during Religious festivals (January-April) and Christmas season Christmas ornaments highly demanded in Christmas season in USA & Europe (November end December) 5. KEY PLAYERS IN THE SECTOR No Name of the Company Website 1 Noritake Lanka Porcelain Pvt Ltd 2 Dankotuwa Porcelain Ltd. 3 Royal Fernwood Porcelain Ltd 4 Lanka Tiles PLC 5 Midaya Ceramic Company Ltd. 6 Art Decoration International Pvt Ltd. 7 Royal Ceramic Lanka Ltd 8 Piramal Glass Ceylon PLC Sri Lankan Ceramic Sector 7

8 6. GEOGRAPHICAL DISTRIBUTION OF MANUFACTURING UNITS ACROSS THE COUNTRY LO. JOR CERAIIC FACTORIES IN SRI LAN KA Logond o airports places Buffer 5km and elevatioo<20m Populated Places \ capital Laroe town Town SmaRtown Vllaoe locality Q Urban sprawls POrts >+++< Railways - Motc<way I Hi!11WaY -- Duallane -- SillQielane -- Track I Trait 1 centimeter equals 12 kilometers Source "Mineral Resources of Sri Lanka" National Science Foundation-Sri Lanka Sri Lankan Ceramic Sector 8

9 7. SIZE IN TERMS OF PRODUCTION (VALUE/QUANTITY) Due to the highly diverse nature in this sector, it is hard to determine the size of production. 8. NUMBER OF PEOPLE EMPLOYED IN THE SECTOR The total workforce of the sector is over 20,000. The tableware and ornamental ware sector employed 16,000 to 18,000. The tile sector accounted 2,000-4,000 workforces. 9. GOVERNMENT POLICY AND SUPPORT AVAILABLE FOR THE SECTOR Related organizations to support the ceramic sector: Government Institutions: 1. Sri Lanka Export Development Board (EDB) undertake programme for the development and promotion of the sector in the following areas. o Product Design & Technology Development Programmes o Market Development programme such as organising buyer -seller meetings (inward/outward), Trade fair participation, Solo country exhibitions, Participation at trade summits and trade forums. o Lobby on Tariff concessions etc. o Provide Trade facilitation services. o Image Building programmes such as advertise in foreign magazines, inviting foreign Journalists to Sri Lanka etc. 2. Board of Investment (BOI) o Facilitate to attract Foreign Direct Investment (FDI) o Investor friendly facilities for BOI projects 3. Department of Commerce (DOC) o Implementing bilateral agreements /trade agreement. o Assistance in organizing of international trade events. 4. (GSMB) o Surveying of raw materials o Testing of raw materials samples o Excavation of raw materials from the deposits o Implementing the regulatory formalities. 5. Industrial Technology Institute (ITI) a. Testing of raw materials b. Research on raw materials Sri Lankan Ceramic Sector 9

10 10. R&D AND PRODUCT DEVELOPMENT FACILITIES AVAILABLE The related institutes for R& D and product development are as follows; Industrial Technology Institute (ITI) Geological Survey & Mines Bureau (GSMB) Centre of Technology Excellence (CENTEC) University of Moratuwa Department of Material Engineering University of Peradeniya Department of Geology 11. TOTAL EXPORTS OF PRODUCTS IN SELECTED CATEGORIES OF THE SECTOR EXPORTS (VALUE IN US$ Mn) Code Description (Jan- Oct) HS 6911 HS 6912 HS 6904 HS 6907 HS 6908 Tableware & Kitchenware of Porcelain & China Of other than Porcelain & China Tiles Flooring blocks and tiles Unglazed ceramic tiles Glazed ceramic tiles HS Roofing tile S Ornaments S Other Ceramic Products nes Total HS 70 Glass & Glassware Source: Sri Lanka Custom statistics Sri Lankan Ceramic Sector 10

11 12. GROWTH IN LAST 5 YEARS IN EXPORTS AND MAIN IMPORTING COUNTRIES Top 10 markets of each sub sector are as follows; Tableware & Ornaments Roof tile Wall Tiles Kitchenware Japan Australia Denmark UK United States Maldives UK Maldives UK United States USA Estonia India Canada Germany Seychelles Australia India Italy Pakistan UAE Singapore Poland Ghana Korea South Taiwan Sweden New Zealand Canada Kenya Norway Mexico UAE Netherlands Malaysia Moldova Japan Source: Sri Lanka Custom statistics Growth of Ceramic Tableware & Kitchenware for top markets for last five years is as follows; 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, (Jan To Oct) United States Japan Australia United Kingdom India Maldives Canada Denmark United Arab Emirates Korea South Source: Sri Lanka Custom statistics Sri Lankan Ceramic Sector 11

12 13. STRENGTHS AND WEAKNESSES OF THE SECTOR Strength Availability of raw materials such as kaolin, ball clay, feldspar, silica, quartz and dolomite locally. The availability of highly skilled and literate work force at reasonable wages. Availability of designers, chemists, technologists and engineers due to sound theoretical and technical Education. Investment friendly environment. Availability of supporting institutions. High ethical standards and confidentiality of design integrity. Weakness Lack of brand awareness and quality recognition in the international market. Lack of understanding of consumers. High cost of energy. Small sector although the products manufactured are of very high quality. Prepared by: Ms. Samanthi Siriwardena - Export Promotion Officer, EDB, Sri Lanka Disclaimer: The Sri Lanka Export Development Board, (EDB), has taken every care in the preparation of the content of this report, but the EDB cannot be held responsible for any errors, defects, lost profits, or other consequential damages arising from the use of any information obtained either directly or indirectly from this report. The EDB accepts no liability whatsoever. Sri Lankan Ceramic Sector 12